Tesla's (TSLA, Financials) not-so-great streak in California just got longer. For the seventh quarter in a row, the company's sales in the state have slipped — this time dropping a hefty 21% in Q2.
According to new industry data, Tesla registered just over 41,000 vehicles in California between April and June. That's a big dip from 52,000 during the same stretch last year. The numbers matter because California has always been a key market for Tesla — one of its biggest and most loyal.
So what's going on? It's a mix of politics, timing, and competition.
Elon Musk's growing political presence — including the recent launch of his “America Party” — has raised eyebrows, especially in California, where progressive values run deep. Some investors are starting to worry he's getting distracted from Tesla's core business. And with rising costs, inflation, and more people weighing their options, loyalty isn't a given anymore.
To add to that, Tesla paused production of the Model Y earlier this year for a refresh — and while the cheaper updated versions are rolling out, it still put a dent in Q2 numbers.
And let's talk competition: hybrid cars are having a serious moment. Registrations in California jumped 54% in the first half of the year, and hybrids now claim nearly 1 in 5 new car sales. Tesla's still leading the EV race — the Model Y and Model 3 were the top two zero-emission vehicles sold in the state — but it's not the wide-open field it used to be.
The Cybertruck? It's slowly rolling out, with 3,600 units registered in California so far this year. Buzz? Yes. Scale? Still in progress.
Meanwhile, Tesla's global deliveries dropped 13.5% in Q2. The company reports earnings after the bell Wednesday, and all eyes are on what comes next. Investors are wondering: Can Tesla find its footing again — or is the road ahead getting bumpier?
